Akalis have shown that a bankrupt state can win elections, but is this sustainable? Probably not.

Manpreet Badal, former Punjab finance minister and nephew of chief minister P S Badal, broke last year with the Akali Dal, complaining that his entreaties for fiscal discipline were being ignored, and would lead to disaster. He looks foolish today after the re-election of the Akali Dal-Bharatiya Janata Party combine.

However, the Akali victory was not based on economic development, as claimed by deputy chief minister Sukhbir Badal. It won because of continuing populism: free electricity for farmers, the subsidised atta- dal scheme, free bicycles for girl students, shagun grants for poor girls.

The Akali-BJP combine actually lost vote share, from 45.4% in 2007 to 41.9% in 2012. This would normally have been fatal. But the Congress could not gain from anti-incumbency; its vote share fell too, from 40.9% to 40.1%.

Why so? Because Manpreet's breakaway party garnered 5.17% of the vote. This took away enough anti-incumbent votes to deny the Congress a victory. Manpreet sought to damage the Akali vote by splitting away, but harmed the Congress vote much more.

Had Manpreet stayed in the Akali Dal despite his disagreements, the Akalis would probably have lost, and Manpreet would have won the internal debate with Sukhbir Badal. By leaving, he unwittingly handed Sukhbir victory in the elections and (for now) even in the fiscal debate. Yet, that debate is not over.

Punjab, once the richest and fastest-growing state of India, has fallen in state rankings. It once had the highest per-capita income among states, but is now down to fourth position (behind Haryana, Maharashtra and Gujarat). It used to grow faster than the national average, pulling it up. Now for two decades, it has grown below the national average, dragging it down.

Free electricity to farmers is the biggest culprit, and accounts for 90% of entire government debt, says agricultural guru S S Johl. Debt service swallows a third of the budget. Punjab now competes with West Bengal at the bottom of the state finances table, and is one of only three states with negative cash balances at the RBI. Punjab cannot even pay government salaries, and retirees are told to wait six months before they can collect money from the general provident fund.

Punjab Agricultural University, the proud institution that created new varieties for the green revolution, is unable to pay salaries. How then can it produce better seeds? Almost half vacant posts of teachers and doctors have not been filled for want of cash, and absenteeism is almost the highest among the states.

The Tribune reported in February that 840 headmasters were not receiving their salaries. The situation is as bad in medical colleges and health centres. Professor Surinder Shukla of Panjab University found in a study of Muktsar that most teachers were trying to migrate. Punjab has a TV channel devoted to migration. Whatever Sukhbir may call this, it is not a triumph of economic development.

Yet, his boast is not entirely empty, and has some substance. Punjab's GDP growth accelerated under the Akalis in 2007-12 to 7% per year against 6% a year under the preceding Congress regime. High inflation has, ironically, eroded the debt/GDP ratio. Government bankruptcy is being finessed through private investment in toll roads and bridges, schools, hospitals, bus transport and electricity generation. While this leaves huge unfilled gaps, it has helped economic development.